Dropbox Makes Its Move on Businesses

Dropbox, a popular app for consumers to store photos and files online, is upping its pitch to businesses and joining the fray vying for a piece of the more lucrative corporate market.

The San Francisco startup is courting a new kind of customer: corporate-tech managers who pay for features like security and support. But it will have to contend with rivals from Microsoft to Amazon to Box, in a market estimated at tens of billions of dollars.

“We want to make both our users and IT really happy, and I don’t think any company has ever done a good job of both,” Chief Executive Drew Houston said in an interview.

Houston unveiled new tools for businesses that pay to use Dropbox Wednesday. The refreshed website and mobile apps, which will become available to some users this week and more broadly in early 2014, let paying customers partition their online lives into two folders: One for personal documents and one for work. The goal is to give employers more control over the data being stored on workers’ devices and hold onto important files when employees leave.

Dropbox is used by employees of more than four million businesses, double the number of a year ago, Houston said at the event. That includes companies where just one worker uses the service; Dropbox doesn’t disclose its number of business customers. In total, more than 200 million individuals use the service.

Dropbox offers consumers limited online storage for free, or much more storage for $99 a year. Businesses pay $795 a year for up to five users and $125 a year for each additional user.

Market researcher IDC estimates that the market for cloud storage services for businesses and consumers will top $38 billion by 2017, up from $23 billion this year. The big players in this space include Amazon and Google.

With Wednesday’s announcement, Dropbox is taking aim at rival Box, an online-storage startup that has focused on the corporate market.

Box says it has 180,000 business customers, many who pay for security, support and other extras. Box recently hired banks to lead an initial public offering which could come in early 2014, Reuters reported last week.

Dropbox said it may include more document-sharing features in upcoming versions of its software, one of the main selling points touted by Box.

Dropbox, which has 400 employees, is rapidly hiring a sales team to go after larger customers. But Houston says the company will continue to rely on workers inside companies as their main source of new customer leads.